Erlanger Health System officials said in October they paid out $3.1 million to 161 managers at its five campuses.
Kevin Spiegel, president and CEO, receivec about a 34 percent bonus on his $800,000 salary.
Vice presidents got between 10 and 30 percent, while administrators received between 7.5 percent and 22.5 percent. For directors and managers, it was between 5 and 15 percent, depending on their segment's performance.
Erlanger officials said:
1. Erlanger’s performance-based compensation model for management is developed through the guidance and advice by a top tier compensation firm that has hundreds of healthcare clients throughout the nation. In Fiscal Year 2016 Erlanger used Sullivan Cotter.
2. Erlanger’s performance-based compensation model is prevalent throughout the healthcare industry, including other local hospitals and industries, and Erlanger has adopted market-based pay practices.
3. Compensation for Erlanger managers has a base pay and “at-risk” component. The “at-risk” component is earned by achieving goals approved by committee of Erlanger’s board.
4. With a competitive compensation model and market-based pay practices, Erlanger is able to recruit and retain top talent.
5. Erlanger’s incentive plan funds itself – the incentive pool is funded with earnings that exceed budget.
6. Managers’ incentive pay was weighted 55% on quality, safety and service goals, and 45% on financial goals.
7. For the second consecutive year, Erlanger associates received a $400 bonus, in addition to a 3% across the board salary increase in January. In 2013, Erlanger’s bottom line was so low it jeopardized future borrowing needed for new equipment and technology, and the health system came close to violating its bond covenants. This past year Erlanger began implementation of a $100 million, 10 year investment with Epic in transitioning to a new electronic medical records system, opened the new Erlanger Orthopedic Institute, completed a $50 million expansion at Erlanger East Hospital and invested $11.5 million towards the building of a new Children’s Hospital.